Regulators cut mobile fees in South Africa

29 January 2014 | Kavit Majithia

Regulators in South Africa have taken the decision to halve the fees mobile companies can charge rival players to use its networks.

The move is intended to increase competition and also reduce mobile call costs in the country, with the Independent Communications Authority of South Africa (ICASA) also cutting call costs per minute by half, to be capped at 20 South African cents per minute per call.

Fixed-line operator Telkom and mobile operator Cell C are likely to benefit the most from the rates, as bills connecting calls to industry leaders Vodacom Group and MTN will drop by 50%.

Cutting fees will allow companies to set up a basis charges to other companies, and fixed-line calls are also also set drop over the next three years.

“Our beacon is to attract local and foreign investors and position this industry as a sector of choice,” said Nomvuyiso Batyi, ICASA’s acting chairwoman.

Vodacom, a subsidiary of UK group Vodafone hit out at the news, and an executive at the company believes the move is bad from customers. The executive told Reuters the decision “rewards those who have not invested in their network at the expense of those who have”.

It is thought the new rates will provide a more equal playing field for the smaller companies in the market.

Telkom and Cell C had campaigned to reduce rates to boost the mobile industry, considering the large bills they have had to pay to the larger players.